Xerox Q2 Revenue Surpasses Expectations

Xerox reported Q2 revenue that beat expectations, driven by strong demand for its services and products. The company has also completed its $1.5 billion acquisition of Lexmark, expanding its portfolio of printing and document management solutions. Xerox's Q1 2025 earnings call is scheduled for May 1, and the company has reiterated its earnings guidance for the year.

Xerox Holdings Corporation (NASDAQ: XRX) announced its second-quarter (Q2) 2025 financial results, revealing a 0.1% decline in revenue to $1,576 million compared to Q2 2024. This decrease was primarily driven by a 1.1% drop in constant currency revenue [1]. Despite the slight revenue reduction, Xerox reported an adjusted net loss of $77 million, or $0.64 per share, a decrease of $118 million or $0.93 per share year-over-year (YOY) [1]. The company's adjusted operating margin also declined by 170 basis points to 3.7% [1].

The quarter's results were bolstered by the completion of the $1.5 billion acquisition of Lexmark, which marks an important milestone in the company's reinvention strategy. This acquisition has expanded Xerox's portfolio of printing and document management solutions, positioning the company as a vertically integrated market leader [1]. Steve Bandrowczak, Xerox's CEO, highlighted the improved resiliency of financial results afforded by the reinvention and the growth in IT and Digital Solutions that helped deliver stable revenue [1].

Key financial highlights include:
- Revenue: $1,576 million (down 0.1% YOY)
- Adjusted net loss: $(77) million ($0.64 per share)
- Adjusted operating margin: 3.7% (down 170 basis points YOY)
- Operating cash flow: $(11) million (down $134 million YOY)
- Free cash flow: $(30) million (down $145 million YOY)

Xerox's Q2 2025 results reflect the company's focus on cost preservation and profitability amid a volatile operating landscape. The company's revenue growth in the IT and Digital Solutions segment was notable, with a 153.6% increase in revenue compared to Q2 2024 [1]. The company also reported a 170 basis point decline in operating income margin, which was attributed to increased costs and lower gross margins [1].

Looking ahead, Xerox has revised its 2025 guidance to reflect the inclusion of Lexmark's financial results beginning July 1. The company expects revenue to grow by 16-17% in constant currency and an adjusted operating margin of around 4.5% [1]. Free cash flow guidance has been revised to around $250 million, including expected tariff-related expenses, one-time costs associated with synergy savings, and a slightly more conservative outlook on print equipment demand [1].

Xerox's Q1 2025 earnings call is scheduled for May 1, and the company has reiterated its earnings guidance for the year. The company's forward-looking statements are subject to various risks and uncertainties, including market conditions, global macroeconomic conditions, and the successful integration of the Lexmark business [1].

References:
[1] https://markets.financialcontent.com/stocks/article/bizwire-2025-7-31-xerox-releases-second-quarter-results